EQUIPMENT OPERATIONS*

FINANCIAL SERVICES

2012

2011

2010

2012

2011

2010

Net Sales and Revenues

Net sales

$

33,500.9

$

29,466.1

$

23,573.2

Finance and interest income

74.0

73.3

64.8

$

2,155.7

$

2,080.8

$

1,975.1

Other income

493.2

455.5

386.2

298.8

292.5

322.5

Total

34,068.1

29,994.9

24,024.2

2,454.5

2,373.3

2,297.6

Costs and Expenses

Cost of sales

25,009.2

21,920.7

17,400.3

Research and development expenses

1,433.6

1,226.2

1,052.4

Selling, administrative and general expenses

2,988.8

2,786.6

2,496.0

439.3

394.4

482.9

Interest expense

231.1

191.4

184.1

596.4

621.0

670.1

Interest compensation to Financial Services

203.6

178.5

186.3

Other operating expenses

178.1

192.5

177.9

708.1

634.2

646.7

Total

30,044.4

26,495.9

21,497.0

1,743.8

1,649.6

1,799.7

Income of Consolidated Group before Income Taxes

4,023.7

3,499.0

2,527.2

710.7

723.7

497.9

Provision for income taxes

1,407.6

1,169.6

1,035.2

251.8

253.9

126.4

Income of Consolidated Group

2,616.1

2,329.4

1,492.0

458.9

469.8

371.5

Equity in Income (Loss) of Unconsolidated Subsidiaries and Affiliates

Financial Services

460.3

471.0

372.5

1.4

1.2

.9

Other

(4.8

)

7.4

9.9

Total

455.5

478.4

382.4

1.4

1.2

.9

Net Income

3,071.6

2,807.8

1,874.4

460.3

471.0

372.4

Less: Net income (loss) attributable to noncontrolling interests

6.9

7.9

9.4

(.1

)

Net Income Attributable to Deere & Company

$

3,064.7

$

2,799.9

$

1,865.0

$

460.3

$

471.0

$

372.5

EQUIPMENT OPERATIONS*

FINANCIAL SERVICES

2012

2011

2012

2011

ASSETS

Cash and cash equivalents

$

3,907.9

$

3,187.5

$

744.3

$

459.7

Marketable securities

1,101.5

502.6

368.9

284.7

Receivables from unconsolidated subsidiaries and affiliates

1,579.0

1,713.4

Trade accounts and notes receivable - net

1,279.7

1,093.9

3,333.3

2,807.2

Financing receivables - net

11.5

14.0

22,147.5

19,909.5

Financing receivables securitized - net

3,617.6

2,905.0

Other receivables

1,092.4

965.6

703.6

370.1

Equipment on operating leases - net

2,527.8

2,150.0

Inventories

5,170.0

4,370.6

Property and equipment - net

4,950.5

4,287.5

61.4

64.9

Investments in unconsolidated subsidiaries and affiliates

4,102.4

3,473.9

8.7

8.1

Goodwill

921.2

999.8

Other intangible assets - net

101.0

123.4

4.0

4.0

Retirement benefits

14.9

29.6

44.6

28.0

Deferred income taxes

3,497.3

3,052.8

50.3

91.2

Other assets

582.9

468.6

883.5

712.6

Total Assets

$

28,312.2

$

24,283.2

$

34,495.5

$

29,795.0

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES

Short-term borrowings

$

424.8

$

528.5

$

5,967.7

$

6,323.8

Short-term securitization borrowings

3,574.8

2,777.4

Payables to unconsolidated subsidiaries and affiliates

135.2

117.7

1,519.3

1,665.5

Accounts payable and accrued expenses

7,679.0

6,869.3

2,129.9

1,547.8

Deferred income taxes

93.3

99.0

338.3

354.7

Long-term borrowings

5,444.9

3,167.1

17,008.2

13,792.8

Retirement benefits and other liabilities

7,673.0

6,686.7

61.2

52.6

Total liabilities

21,450.2

17,468.3

30,599.4

26,514.6

Commitments and contingencies (Note 22)

STOCKHOLDERS’ EQUITY

Common stock, $1 par value (authorized — 1,200,000,000 shares; issued — 536,431,204 shares in 2012 and 2011), at paid-in amount

3,352.2

3,251.7

1,834.7

1,570.6

Common stock in treasury, 148,625,875 shares in 2012 and 130,361,345 shares in 2011, at cost

(8,813.8

)

(7,292.8

)

Retained earnings

16,875.2

14,519.4

1,958.3

1,541.5

Accumulated other comprehensive income (loss):

Retirement benefits adjustment

(4,759.0

)

(4,135.4

)

Cumulative translation adjustment

184.1

453.8

98.3

164.7

Unrealized loss on derivatives

(13.4

)

(8.3

)

(11.6

)

(8.3

)

Unrealized gain on investments

16.8

11.9

16.4

11.9

Accumulated other comprehensive income (loss)

(4,571.5

)

(3,678.0

)

103.1

168.3

Total Deere & Company stockholders’ equity

6,842.1

6,800.3

3,896.1

3,280.4

Noncontrolling interests

19.9

14.6

Total stockholders’ equity

6,862.0

6,814.9

3,896.1

3,280.4

Total Liabilities and Stockholders’ Equity

$

28,312.2

$

24,283.2

$

34,495.5

$

29,795.0

EQUIPMENT OPERATIONS*

FINANCIAL SERVICES

2012

2011

2010

2012

2011

2010

Cash Flows from Operating Activities

Net income

$

3,071.6

$

2,807.8

$

1,874.4

$

460.3

$

471.0

$

372.4

Adjustments to reconcile net income to net cash provided by operating activities:

Provision (credit) for doubtful receivables

6.0

4.5

6.3

(.9

)

9.0

100.1

Provision for depreciation and amortization

643.1

587.0

548.7

439.2

401.5

424.6

Goodwill impairment charges

33.4

27.2

Undistributed earnings of unconsolidated subsidiaries and affiliates

(413.7

)

(118.8

)

(156.7

)

(1.3

)

(1.0

)

(.9

)

Provision (credit) for deferred income taxes

(115.7

)

(278.3

)

74.8

23.9

110.2

100.2

Changes in assets and liabilities:

Trade receivables

(255.0

)

(109.5

)

(333.0

)

Insurance receivables

(338.5

)

(300.1

)

Inventories

(947.6

)

(1,281.8

)

(647.7

)

Accounts payable and accrued expenses

887.0

1,027.0

1,062.9

382.1

351.3

5.7

Accrued income taxes payable/receivable

(102.7

)

45.3

6.5

30.4

(44.1

)

15.6

Retirement benefits

71.2

483.2

(140.1

)

(7.9

)

12.1

(14.0

)

Other

70.5

(168.0

)

221.6

(109.9

)

55.1

270.5

Net cash provided by operating activities

2,948.1

2,998.4

2,544.9

877.4

1,065.0

1,274.2

Cash Flows from Investing Activities

Collections of receivables (excluding trade and wholesale)

14,320.7

13,333.1

12,287.7

Proceeds from maturities and sales of marketable securities

200.1

.3

40.2

32.2

38.4

Proceeds from sales of equipment on operating leases

799.5

683.4

621.9

Government grants related to property and equipment

92.3

Proceeds from sales of businesses, net of cash sold

30.2

911.1

34.9

Cost of receivables acquired (excluding trade and wholesale)

(16,730.2

)

(15,365.9

)

(13,681.6

)

Purchases of marketable securities

(802.2

)

(503.1

)

(120.0

)

(83.8

)

(63.4

)

Purchases of property and equipment

(1,316.2

)

(1,054.3

)

(735.5

)

(3.1

)

(2.4

)

(26.2

)

Cost of equipment on operating leases acquired

(1,562.0

)

(1,230.5

)

(1,098.4

)

Increase in investment in Financial Services

(264.1

)

(69.0

)

(43.8

)

Acquisitions of businesses, net of cash acquired

(60.8

)

(37.2

)

(8.3

)

Increase in trade and wholesale receivables

(1,518.5

)

(561.8

)

(838.8

)

Other

(95.6

)

(79.5

)

(32.9

)

138.8

(35.7

)

18.3

Net cash used for investing activities

(2,247.8

)

(855.3

)

(814.5

)

(4,634.6

)

(3,231.4

)

(2,658.1

)

Cash Flows from Financing Activities

Increase (decrease) in total short-term borrowings

(36.4

)

230.8

(127.9

)

931.3

(456.9

)

883.9

Change in intercompany receivables/payables

45.5

(552.6

)

(1,229.9

)

(45.5

)

552.6

1,229.9

Proceeds from long-term borrowings

2,521.5

69.0

305.0

8,120.5

5,586.0

2,316.0

Payments of long-term borrowings

(220.1

)

(11.5

)

(311.5

)

(5,175.9

)

(3,209.3

)

(3,364.2

)

Proceeds from issuance of common stock

61.0

170.0

129.1

Repurchases of common stock

(1,587.7

)

(1,667.0

)

(358.8

)

Capital investment from Equipment Operations

264.1

69.0

43.8

Dividends paid

(697.9

)

(593.1

)

(483.5

)

(43.5

)

(340.1

)

(217.2

)

Excess tax benefits from share-based compensation

30.1

70.1

43.5

Other

(32.7

)

(17.3

)

(20.7

)

(33.6

)

(31.2

)

(20.6

)

Net cash provided by (used for) financing activities

83.3

(2,301.6

)

(2,054.7

)

4,017.4

2,170.1

871.6

Effect of Exchange Rate Changes on Cash and Cash Equivalents

(63.2

)

(2.3

)

(17.2

)

24.4

13.7

(7.3

)

Net Increase (Decrease) in Cash and Cash Equivalents

720.4

(160.8

)

(341.5

)

284.6

17.4

(519.6

)

Cash and Cash Equivalents at Beginning of Year

3,187.5

3,348.3

3,689.8

459.7

442.3

961.9

Cash and Cash Equivalents at End of Year

$

3,907.9

$

3,187.5

$

3,348.3

$

744.3

$

459.7

$

442.3